Best Cloud Accounting Software for UK Agencies

For agencies, accounting software is not just a compliance tool — it’s the backbone of your financial operations. The right platform handles invoicing, bank reconciliation, VAT returns, and management reporting without you needing to think about it. The wrong one creates bottlenecks, manual workarounds, and blind spots in your numbers.

Agencies have specific needs that generic small-business software often misses: multi-currency invoicing for international clients, project-based tracking to understand profitability per client, and integrations with tools like Harvest, Asana, or HubSpot that connect time tracking to billing.

Xero is the most popular choice among UK agencies, and for good reason. Its tracking categories let you tag income and expenses by client, project, or department — giving you profitability views that other platforms struggle to match without add-ons.

The ecosystem is the real differentiator. Over 1,000 integrations mean Xero connects to virtually any tool your agency uses. Harvest for time tracking, Stripe for payment processing, Dext for receipt capture, and Float for cash flow forecasting all plug in natively.

QuickBooks Online has improved significantly in recent years and is a genuine contender for agencies, particularly those that value detailed reporting out of the box. Its profit and loss by project feature works well for agencies running distinct client accounts.

Where QuickBooks falls short for agencies is the integration ecosystem. It has fewer connections to agency-specific tools than Xero, and some key integrations (like Harvest) work more seamlessly with Xero. The user interface is also more complex, which can slow down your team if they need to log expenses or check invoices regularly.

Here is how the four main platforms compare on the features that matter most to UK agencies. No software is perfect for every agency — the right choice depends on your size, complexity, and what tools you already use.

FreeAgent works well for freelancers and very small agencies (1–3 people). Its self-assessment tax features are excellent, and it’s included free with NatWest, RBS, and Mettle business accounts. However, it lacks the depth of reporting and project tracking that growing agencies need.

Sage Business Cloud Accounting is the legacy choice. Many agencies still use it because they started on Sage years ago. The newer cloud version is competent but does not match Xero or QuickBooks for integrations, user experience, or agency-specific features. If you are on Sage and considering a switch, the migration to Xero is straightforward.

The decision comes down to three factors: your agency’s size, the tools you already use, and whether you need project-level profitability tracking.

For most agencies with 5 or more people, Xero is the safest choice. The integration ecosystem, unlimited users, and tracking categories give you room to grow without switching platforms. If you are a solo operator or freelancer, FreeAgent offers excellent value, particularly if you bank with NatWest. QuickBooks is worth considering if your priority is out-of-the-box reporting and you do not rely heavily on third-party integrations.